Noting that it “does not expect the aviation industry to return to pre-coronavirus crisis levels very quickly,” the Executive Board of Deutsche Lufthansa AG has decided on extensive measures to reduce the capacity of flight operations and administration long term.
The Executive Board said in a statement that according to its assessment, it will take months until the global travel restrictions are completely lifted and years until the worldwide demand for air travel returns to pre-crisis levels.
The Board’s decisions will affect almost all flight operations of the Lufthansa Group.
At Lufthansa, six Airbus A380s and seven A340-600s as well as five Boeing 747-400s will be permanently decommissioned. In addition, eleven Airbus A320s will be withdrawn from short-haul operations.
The six A380s were already scheduled for sale to Airbus in 2022. The decision to phase out seven A340-600s and five Boeing 747-400s was taken based on the environmental as well as economic disadvantages of these aircraft types. With this decision, Lufthansa will be reducing capacity at its hubs in Frankfurt and Munich.
Furthermore, Lufthansa Cityline will also withdraw three Airbus A340-300 aircraft from service. Since 2015, the regional carrier has been operating flights to long-haul tourist destinations for Lufthansa.
Eurowings will also be reducing the number of its aircraft. In the short-haul segment, an additional ten Airbus A320s are planned to be phased out.
Eurowings long-haul business which is run under the commercial responsibility of Lufthansa, will also be reduced.
In addition, the implementation of Eurowings objective of bundling flight operations into only one unit, which was defined before the crisis, will now be accelerated. Germanwings flight operations will be discontinued. All options resulting from this are to be discussed with the respective unions.
The restructuring programs already initiated at Austrian Airlines and Brussels Airlines will be further intensified due to the coronavirus crisis. Among other things, both companies are working on reducing their fleets.
SWISS International Air Lines will also adjust its fleet size by delaying deliveries of new short haul aircraft and consider early phase-outs of older aircraft.
In addition, the Lufthansa Group airlines have already terminated almost all wet lease agreements with other airlines.
The aim remains the same for all employees affected by the restructuring measures: to offer as many people as possible continued employment within the Lufthansa Group.
Therefore, talks with unions and workers councils are to be arranged quickly to discuss, among other things, new employment models in order to keep as many jobs as possible.
GBTA Reschedules Annual Convention
The Global Business Travel Association (GBTA) says that it has rescheduled its annual convention.
Originally set for July 25 to 29 in Denver, the event will now take place from Nov. 7 to 11.
GBTA’s chief operating officer and executive director, Scott Solombrino said of the decision: “This is the first time in GBTA’s 52-year history of Convention that we have had to reschedule our signature event. This unprecedented move comes in unprecedented times. We are all working to ensure the safety of business travelers and their families. We are hopeful that the pandemic will subside on a global level and that we will be able to help travel managers and sponsors determine how best to revive the industry when we meet in November.”
Solombrino continued: “We rescheduled the event after several weeks discussing options with officials at the Denver Convention Center. We all agreed that there was no way to hold a safe, healthy, and successful conference in July, so we agreed to push the dates out as far as possible in 2020.”
He added that GBTA “will continue to work with the State of Colorado, City of Denver, the Convention Center and health officials to ensure we can have our Convention in November. Our hope is that the pandemic will pass within the next few months and we will be able to resume our normal activities. But if that is not the case, we may need to push Convention back further. I will continue to keep you informed on the status of Convention.”
Go to www.gbta.org for more.
Committed Staff, Key To Future Success
The lack of staff commitment could threaten the future profitability of travel companies, according to GlobalData.
The data and analytics company says that industry wide, travel companies are making staff adjustments to stay operational during this coronavirus-induced existential crisis, putting staff commitment under considerable strain.
It notes that a de-motivated workforce will jeopardize the service level provided, in turn affecting the reputation, return on investment (ROI) and the financial performance of a company.
Freezing recruitment, reducing working hours, decreasing pay, furloughing workers and, in some cases, redundancies have been adjustments undertaken by companies across the sector. Staffing adjustments have been the most common action undertaken by travel management so far to ultimately save costs.
The ethical standards of a company can reflect on the treatment of the workforce and, as more drastic measures are taken, employee wellbeing should not be forgotten.
In its Global Q4 2018 Consumer Survey, GlobalData found that 81% of the global traveller community are ‘always’, ‘often’ or ‘somewhat’ influenced by ethics. Thus, post-COVID-19, employers that have mistreated their workforce in any way may be shunned by the public but also by their own workforce, significantly affecting their operational performance.
Johanna Bonhill-Smith, travel and tourism analyst at GlobalData, observed: “This has now gone beyond freezing recruitment as the number of companies taking drastic measures increases dramatically day-by-day. Larger travel players such as TUI, Hays Travel and even the likes of online travel agents (OTAs) such as Booking.com have had to make substantial staff adjustments in order to save on costs during a time where cash is vital.”
Bonhill-Smith continued: “However, among smaller independent companies, management are looking to form more creative solutions to ensure their workforces remain motivated and in-cohort at this time of uncertainty, whether by aiding the community or developing relationships. TailorMadeTravel, for example, introduced a virtual call center for the National Health Service (NHS) in the UK.”
And she added: “Even though staffing adjustments are vital for many a company to stay in operation, ethical standards and employee wellbeing must still be considered. Conclusively, in a post-COVID-19 world a committed workforce will be a key differentiator in the operational efficiency and productivity of one company over another.”
More From Lufthansa, SWISS, Austrian
The Lufthansa Group is continuing to offer greater flexibility to its customers. Lufthansa, SWISS and Austrian Airlines are changing their ticket fare structure. With immediate effect, all fares and ticket prices can be rebooked. This applies worldwide for new bookings on short, medium and long haul routes. For tickets purchased in the USA and Canada, the new policy will take effect today (April 8). Brussels Airlines will also apply the new fare structure on routes to/from North America.
Irrespective of the new fare structure, passengers whose flights have been cancelled or not addressed at this time, can still keep their reservations. This applies to flights with a booking date up to and including April 19, 2020. Customers do not have to commit to a new date at this point.
The ticket and ticket value is retained and can be converted for a new booking with a departure date up to and including April 30, 2021. Customers who choose a new travel date up to and including the end of 2020 will also receive a $50 discount on each rebooking.
In the event a customer prefers a refund in lieu of the voucher promotion, the customer may notify a Lufthansa Group representative that a refund is preferred and refunds will be processed as best as possible, while taking the global crisis circumstances into account.
Rebooking is handled via Lufthansa Group Customer Service and the airlines’ online platforms or travel agencies. The conversion into a voucher is possible online via the airlines’ websites. An automatic function for redeeming the voucher is currently being developed and will be available soon.
If the rebooked fare is more expensive due to a change of destination (rebooking from short-haul to long haul), change of travel class or similar, an additional charge may be necessary despite the discount.
Due to the current situation, Lufthansa Group Service Centers and stations are recording an exceptionally high number of customer communication. The Lufthansa Group is continuously working to adjust capacity to meet demand. However, there are currently long waiting times, which unfortunately means that the processing of customer requests can be delayed.